A food crisis looms. UN's issuing a warning and global prices are soaring.

And Man U prepares to float. Investors are cheering. The fans aren't.

I'm Richard Quest, and I mean business.

Good evening. Standard Chartered Bank is fighting back against New York regulators. The bank was branded a rogue institution and is now painting its accusers with pretty much the same brush. Standard Charter's chief exec says the allegations against it are "factually inaccurate" and they've damaged the bank's reputation.

If you join me over the library, you'll see what we're talking about tonight. This is the man. He's Peter Sands, he's the chief executive of Standard Chartered. He cut his summer holiday short to deal with the crisis, and he told the "Financial Times," the entire U-turn system would have been illegal for the $250 billion figure. But the way they did it was perfectly legal.

He also said removal of US license would be wholly disproportionate and without precedent. And he says the only part of their transactions that breached the OFAC regulations, that's against dealing with Iranian sanctions, was just $14 million.

(BEGIN VIDEO CLIP)

PETER SANDS, GROUP CEO, STANDARD CHARTERED: Made clear we were very surprised by the announcement by the New York Department of Finance -- Financial Services on Monday. And we strongly reject both the position and the facts, the portrayal of the facts by the DFS. We differ on a range of matters of substance, fact, and argument.

(END VIDEO CLIP)

QUEST: A robust response, indeed. Sources tell the FT that the bank may take legal action to protect its reputation, and its share price, which has been damaged, the shares are recovering after losing a quarter of their value.

Now, the man, of course, who's brought the actions is Benjamin Lawsky, the superintendent of Financial Services, and he says the case will continue. It's a case, he says, about Iran, money laundering, and national security. And particularly he makes the point, "No bank, big or small, foreign or domestic, is above the law."

So, what we have here is a fascinating tussle between two giants, a regulator on the one side and the bank on the other. Andrew Stoltmann is the lawyer specializing in securities frauds, joins me now, live, from Chicago.

Mr. Stoltmann, it is unusual, to say the least, to have somebody basically saying to the regulators, "bring it on."

ANDREW STOLTMANN, SECURITIES LAWYER: Boy, you have to be real careful when you encourage an American regulator to bring it on because, of course, Mr. Lawsky and his department, they do have the authority to yank the license to do business for Standard Chartered here in the United States, which would be cataclysmic to the bank. So, be careful what you ask for, because you might get the fight you are looking for.

QUEST: But if he's right and he does say that these U-turn transactions were valid pre-2008, then he is entirely right, surely, to stand his ground?

STOLTMANN: Absolutely. Look, if they did nothing wrong, then the bank absolutely should stand its ground and encourage a fight. And on August 15th, 10:00 in the morning New York time, it will have its opportunity to present its case if there isn't a settlement or a delay before then.

QUEST: We know that they had been talking for some time about the compensation -- or the fine, the penalty, whatever -- for this $14 million that they admit, which you would have to agree is not quite diminutive, but it's relatively small in the context of all the transactions.

Benjamin Lawsky is now being painted by other regulators as having been maverick and rogue and gone on a frolic of his own, perhaps for his own ambition.

STOLTMANN: There is no question about that. And there are a number of US regulators, including the Department of Justice, the Treasury, and some other ones, as well, that are very upset with him, because they think he has overstepped his grounds.

They think that he's doing this for the publicity that it generates. And I'm telling you, the regulators here in the United States are a little bit like teenage girls. They can get very, very catty when somebody steps on their toes.

QUEST: Well, if they are like teenage girls, think about the bank, who has to flirt and date with them all at some point without being promiscuous. It is difficult to -- I mean, how does anybody -- because at any point, any one of those regulators --

Is there no mechanism for them to say, actually, "This is yours, Mr. Federal," "No, this is yours Mr. State," "No, Mr. Attorney General, this is yours"?

STOLTMANN: No. Some people have kind of called it that Balkanization of regulation here in the United States. There are federal regulators, who get to investigate basically whatever they want, and then there are some state regulators, like Mr. Lawsky's department, that does have the ability to investigate as well.

But typically, you will see the coordinated responses. Typically, you would see them acting in concert together.

QUEST: But do you --

STOLTMANN: But you're not seeing that in this case.

QUEST: No, you're not. And do you support this -- this competitive spirit of regulation, where it is he who acts first who might get to the courtroom door?

STOLTMANN: Actually, I do, because our regulator her in the United States have been incredibly incompetent for the last 30 years. They have missed dozens of massive, large scams. So, when you get a scrappy state regulator coming in and taking these, in effect, larger federal regulators to task and doing the job that they were either A, unwilling to do or B, acting too slowly, I like to see it.

I like to see multiple regulatory eyes, including the state regulator, looking at a problem and taking action.

QUEST: Fascinating discussion. Final question. If Lawsky wins, does this preclude all the other regulators from literally biting the other leg and another one going for the arm and somebody else? Or can they each still go and have a bite at Standard Chartered?

STOLTMANN: It's kind of like you will have a whole bunch of piranhas attacking one corpse that's in the water. No, they can all attack, and they likely all will attack. Typically, you'll see a coordinated response and you'll see a coordinated settlement. It looks like we may not have this in this case.

QUEST: You and I will talk more about this. Good to have you on the program tonight talking common sense from Chicago on the regulation of the banking industry.

Standard Chartered, the shares were the biggest gainers. In London, they were up 3.6 percent. But let's not get too excited. They have, of course, suffered so sharply in recent days.

Look at the rest of the market. Glencore up 2 percent, Xstrata. In fact, the minerals were up quite strongly, Randgold one of the reasons for that, we'll talk about that later. Commerce Bank down more than 4, Nestle up over 2 percent, strong earnings.

As for the big board in New York, we are in the dog days of summer. Paul Donovan in his morning note from -- Paul Donovan of UBS said, of course, in his morning note that we need to conserve our energy, because it's going to be a busy September. And that seems to be what they're saying here, down 13.7, 1361. There's the numbers, hardly worth talking about it.

Most of the market movement was due to China, where investors were hoping for more economic stimulus. The figures suggest the economic breaks are well and truly on, consumer prices rising at a much lower rate.

Manufacturing growth is off. Beijing says inflation called more than expected in July, at 1.8 percent. The national target is 4 percent. And if you look, industrial production missed its numbers.

(LAUGHTER)

QUEST: Bear in mind what we saw with Germany, where industrial production was down 0.9 percent. In China, it's up 9.2 percent. It surely does show you the difference.

We've got to make light of this, I suppose, because the difference is so extreme. Same with retail sales, up 13.1 percent, which if you compare to the eurozone, was -- just miserly.

Also tonight, Barclays has named Sir David Walker as its new chairman. He's a veteran of the industry. He works for Morgan Stanley International, he worked at the UK Treasury.

This is a man who has been at the center of British commerce, finance, and banking for the last 30 to 40 years. If there's a body buried out there, he probably knows where it is. He will take over as chairman from Marcus Agius on November the 1st, who of course resigned over the scandal.

An historic night in London. The winners of the first ever full female boxing competition are crowned at the Olympics and -- the Quest- athlon, day four, after the break.

(COMMERCIAL BREAK)

QUEST: Now, the world's fastest men will do battle once more tonight at the London Olympics 200 meter final. And here on QUEST MEANS BUSINESS, it's the battle of the world's greatest economies as we continue. Welcome to day four -- bit of music -- of the Quest-athlon.

(BEGIN AUDIO CLIP)

(CROWD CHEERING)

(END AUDIO CLIP)

QUEST: These are the competitors that we have: Great Britain; Brazil, the next host; China, the fastest-growing economy; Germany; and the United States. We have had -- we've had several sessions so far.

On the question of GDP growth, China won. On the question of stock market growth, Germany was in the winning rate. And as for the Triple-A Credit Rating Weightlifting, it was Germany and the UK.

So today's Quest-athlon is the Unemployment Hurdles. Now, the lowest unemployment rate wins. So, first of all, the United States, last place with an unemployment rate of 8.3 percent. The UK, not far behind, fourth place, 8.1 percent.

If medals are being given out, Germany gets third place, bronze, at 6.8 -- this is only one part, remember, 6.8. And Brazil, second place with 5.8 percent.

(BEGIN AUDIO CLIP)

(CROWD CHEERING)

(END AUDIO CLIP)

QUEST: But the winner of the Unemployment Hurdles tonight, with an unemployment rate of 4.1 percent is China.

(BEGIN AUDIO CLIP)

(CROWD CHEERING)

(END AUDIO CLIP)

QUEST: And day four of the leader board as we look overall. Germany still leads. It has 15 points. China's pushing hard, 13 points. But anyone can win gold by the time you get to the fifth day. It's a three-way for bronze going into the final day, China in the lead.

For the first time in Olympic history, women's boxing is a full Olympic event, and tonight, we have our champions. Becky Anderson is at the Olympic Park. I saw the last part of that, and -- the sheer delight on the winner's face.

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: Yes.

QUEST: It's the first time competing. It was extraordinary.

ANDERSON: Forget the rumble in the jumble -- the jumble. The rumble in the jungle, let me say. Boxing's really come of age today, Richard. Unbelievable. It was an exhibition sport way back when, 1904, 1908, I think. But for the first time, women have been able to compete in the boxing events, in the 35th event. It was the last event women have been allowed to box in.

And the US, Great Britain, and Ireland coming out trumps in that today, kicked off with Nicola Adams in the flyweight for Team GB, adding to their gold medal haul, followed by the 17-year-old female boxer, Claressa Shields. What a performer she is, adding to the US medal haul today. And helping out Ireland, who've had, I think, one other in the swimming, I believe --

QUEST: Right.

ANDERSON: -- getting a gold medal in the middleweight, or in the lightweight, I'm sorry, yes.

(CROSSTALK)

QUEST: Listen. Listen --

ANDERSON: So, it's been a fantastic day for -- sorry.

QUEST: Who knows? Middleweight, lightweight, heavyweight. It's all a weight on my mind. I tell you, once they start actually doing it --

ANDERSON: It matters if you're in the ring, Richard.

(LAUGHTER)

QUEST: Well, that's true, if you're a lightweight and you see -- anyway. All right. Good point. Point well taken. But listen, Becky, tonight there is really amongst stars, there is a star that will perform.

ANDERSON: Yes. And I think the audience already in the stadium behind me, they're already cheering for various events that are going on, not least the Decathlon, which is climbing towards its pinnacle, as it were.

But tonight is the 200 meters final, and Usain Bolt, qualifying in a time of 20.18. He holds the world record at 19.19, which is what he broke in Beijing back in 2008. He's got the Olympic record, 19.30. So expect a really fast run tonight.

He wants to be a living legend when he leaves London. Quite possibly, he will be a living legend. If you're betting against him tonight, don't watch. Because I'm pretty sure we're going to see the man do back-to- backs, 100 and 200 meter gold medals. I would expect to see Usain Bolt on the podium followed, I think, probably by his teammate Yohan Blake.

QUEST: We look -- your predictions have been noted and will be held against you in evidence in the future.

(LAUGHTER)

QUEST: Many thanks, Becky Anderson, CONNECT THE WORLD coming tonight live, of course, from the Olympic studio, the Olympic Park.

2016 Olympic Games will be Rio de Janeiro, and here's the Currency Conundrum. Now, I think it's pronounced "cifrao" it's the currency symbol used for Brazil's currency, the real. Our question is, how does it differ from the dollar sign? Is it a mirror image? Does it have two strikes through instead of one? Or is it flipped on its side? Good question.

Euro slipped for day four, it's down three quarters of a percent. The yen and sterling are down a third of a percent against the currency. Those are the rates --

(RINGS BELL)

QUEST: -- this is the break.

(COMMERCIAL BREAK)

QUEST: An American drought isn't just America's problem. The effects are radiating around the world, and today we find out how much it's costing US with the release of the UN's food and agriculture organization's monthly food index.

After three months of declines, the wholesale cost of food jumped by 6 percent in July, thanks mainly to a surge in the cost of grains and sugars. Here at the CNN super screen, you'll show -- the worst US drought in half a century's affecting large swathes of the corn belt, damaged the maize crops.

So, if you take a look here, you'll see, corn prices are up 23 percent. It's the worst US drought in 50 years. Six states have declared themselves disaster zones, and that, of course, is having the mushroom effect. It is these numbers, up 23 percent, that are causing the problems.

And we can see that further with cereal prices, up 17 percent, exacerbated by Russia, where the drought there is causing concern there may be a repeat of export controls. You'll remember President -- or Prime Minister Putin did that once before. Now there's the question of whether they would do that again.

If it wasn't bad enough for corns and cereals, we also have sugar prices. They are up 12 percent, and the reason here, Brazil's floods and Australia, which also has a drought. That has take the -- price up, as well.

It doesn't matter which we talk about, whether we're talking about grains, cereals, wheat, the senior economist for the UN Foods and Agriculture Organization says, while there's not a food crisis yet, global panic could soon bring one about.

(BEGIN VIDEOTAPE)

ABDOLREZA ABBASSIAN, SENIOR ECONOMIST, UN FOOD AND AGRICULTURE ORGANIZATION: Well, I hope that will not be the case, but one thing in economics is you get high prices and you get rationing, you get people actually consuming less because they can't afford it.

It is not a simple thing that we're just making it up. The prices we published today for July is not a number that comes out of our books. It's a market price, and it tells you that prices went up 6 percent on average on the global level. That is after three months of a decline, so there are obviously fundamental reasons behind it.

And these reasons obviously cause concern for many countries, especially the poorer countries, which have to rely on a world market to import their food.

QUEST: So, what do you want to do? There is clearly a problem with supply. Demand is clearly not going down. The laws of economics 101, prices are going to go up.

ABBASSIAN: Well, if the supply situation is as tight as it is and it doesn't get any worse, hopefully it will not go any further. But you are absolutely right, it can go further up. What can be done about it is that we don't make mistakes.

We can't change the weather, even if we want to, from today to the next. But a lot of things we can do. We can make sure we don't make the same mistakes we made in 2007 and 08 when some countries put export restrictions out of panic.

We are not -- we are saying that look, this is not a panic situation. Supplies are there, countries should not react and make, I would say, wrong policies. So there are a lot of things we can do, or probably rather we should say, there are a lot of things that we shouldn't be doing, and we should not do them.

QUEST: Realistically, as we discovered with Russia just a year or so ago, when its exports restrictions, realistically, when it comes to protecting your own market rather than worrying about next-door, it's a beggar thy neighbor policy, you know it.

ABBASSIAN: Well, I think in this case, fortunately, we are in the US hand and US policy had never shown that restrictions or restricting exports have been one of the options. It's not in the cards, and US will be exporting and will have enough to export. So, that is a comforting sign.

We hope that other countries, out of the panic, do not decide to restrict their own sales into the world market, because they're worried about domestic inflation. Hopefully, this will not happen.

(END VIDEOTAPE)

QUEST: The rising part of food and the United Nations. Here are some lackluster words for you about the shiny commodity. How about "lacking momentum," "near steady," and "quiet trade?" Now, they're being used to describe the gold market today, which is highly unusual, bearing in mind recent years where there's been so much froth to get excited about. Now, that's evaporated.

Randgold Resources, though, saw its profits surge 41 percent in the first half of the year. Production was up strongly by 27 percent. It's been an eventful six months for Randgold. A coup in Mali, where most of its production is based. A coup, indeed, where the CEO was in country at the time.

The jump in profits comes despite the dropping of -- drop in the price of gold and that political upheaval and economic crises. I asked the chief executive, Mark Bristow, which areas he tackles first.

(BEGIN VIDEOTAPE)

MARK BRISTOW, CHIEF EXECUTIVE, RANDGOLD RESOURCES: The focus, like everything, Richard, is management. I said last time we met, it's all in management. And what really came together this quarter is that management team started really working together.

And we've seen this time and again, spend time on management, on local management. We manage crises because we have local management who run our operations. And in LULU, really their team, we've been working on for three years, suddenly delivered.

QUEST: Which, of course, is about time.

BRISTOW: It is about time, but it's worth it to get --

QUEST: You and I have talked about this one for a long time, and you've said it would get there eventually. It's not there fully yet.

BRISTOW: No, on timeline, it's not there, but I think in LULU, we're there. The management team, you can train. We threw the coup at it and it managed a whole lot of things and it just got stronger and stronger and stronger, literally in a couple of quarters.

QUEST: You took great praise, didn't you, for being there, didn't you? For the management and leadership that you gave. Looking back during the coup and during the period when you were leading there, did it seem like that at the time, or were you just getting on with what was needed to be done?

BRISTOW: Now, we just did what we do. And there's so many relationships and there was so much concern over that political impasse. Because that's what it was. Basically, the old government lost its political mandate. People referred to the coup, but it happened because the last government lost its political mandate. It was a passive -- a supported change.

QUEST: For companies like yours, that is always a dangerous moment --

BRISTOW: Yes.

QUEST: -- because the new lot can often either nationalize, get rid of, or simply do you great damage economically.

BRISTOW: Yes, but I think what was interesting in Mali was there wasn't a new lot. It's all the same, it's just that actual authority, that political mandate from the people. So, we -- the replacement interim government, easy to work with.

QUEST: Were you ever scared? Were you ever frightened for your own safety?

BRISTOW: No. No, never.

QUEST: Really?

BRISTOW: Yes.

QUEST: Let's talk about the price of gold.

BRISTOW: I think there's more upside than downside --

QUEST: Wait, let me finish the question!

(LAUGHTER)

QUEST: Let me finish the question! I'm reading articles day after day saying that gold is a busted nut.

BRISTOW: Never. Even on a pure commodity basis, the industry's X growth. The central banks are still buying the stuff. There's an underpin in the emerging Asia that's still growing on jewelry offtake. And we're, as miners, are lifting the base of the cost of production all the time. We are, of course, an exception to that.

But I think everyone gets hysterical when the price moves $100, but $100 and $1500 isn't material. We've come from $300, remember. And if you look at the trend, I believe it's still intact.

QUEST: And if you look at the global economic forecast, 2, 3 percent or whatever, you look at Europe, does that -- I suppose the question, if they print too much, inflation means gold comes back up again. But the high price is hard to sustain.

BRISTOW: But how high is high? I don't think this is a high price, and I think there's two things to this. Right now we're in a situation where everyone's printing money, keeping inflation down, trying to step up the engines. And when that works, you're right, there's going to be inflation.

(END VIDEOTAPE)

QUEST: Mark Bristow, possibly one of the few people who, although he doesn't relish the prospect, certainly has a smile on his face at the thought.

Man United's biggest summer deal is about to be agreed, and we don't mean a new player. It's the price of a share of the club. We'll have more in a moment.

(COMMERCIAL BREAK)

RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and, on this network, the news always comes first.

(BEGIN VIDEO CLIP)

QUEST (voice-over): Now Syrian opposition groups say at least 92 people have been killed today in clashes across the country. Video posted online appears to show lingering dust from shelling in Aleppo. The government says it ousted rebels from the city's Salah ad Din neighborhood. Opposition fighters say they're calling in reinforcements.

It's a case of tanks, trucks, troops and armored vehicles that have been rolling into the northern Sinai on the second day of Egypt's assault on militants. The country's also using heavy construction equipment to close smuggling tunnels running between Gaza and Sinai. The assault comes days after militants killed 16 Egyptian soldiers in an attack.

The murder trial of the wife of a disgraced Chinese official wrapped up in China after just seven hours. No verdict in the high-profile case has so far been announced. Gu Kailai and her family aide have been accused of poisoning the British business man Neil Heywood last November, apparently alleged over a business dispute.

At the Olympics, the American boxer Claressa Shields has just won gold in the women's middleweight division. The 17-year old is the youngest boxer to win an Olympic title since 1924. Also, Katie Taylor won the lightweight division to give Ireland its first gold of the London Games.

(MUSIC PLAYING)

QUEST: Manchester United are set to reveal the price of their initial public offering. A share in one of the world's biggest football clubs and most popular clubs, well, it's likely to cost you between $16 and $20 a share. They will begin trading on the New York exchange tomorrow, Friday morning. If investors are agog to buy, Jim Boulden now tells us, United fans are not cheering the sound of the opening bell.

(BEGIN VIDEO CLIP)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Manchester United has made plenty of headlines over the past decade. It has been the most successful English football club on the pitch for a generation, not to mention the headlines when buying and selling star players.

But there has been just as much drama coming from the boardroom.

It all kicked off in 2005, when the Glazer family of the United States secured a successful takeover. Many supporters worried their beloved club was becoming a private cash generator for a foreign-based owner.

GAVIN HAMILTON, "WORLD SOCCER" MAGAZINE: Manchester United are already the world's most profitable club. They already make more money from merchandise than any other club. So the fans are asking how on Earth he's going to squeeze more money from us when we're -- and we already pay over the odds for everything.

BOULDEN (voice-over): They also feared the Glazers would load hundreds of millions of dollars of debt on the book.

SEAN BONES, MANCHESTER UNITED SUPPORTERS TRUST: Manchester United, of course, is our customers of this company and customers of the company are against the owner, and the numbers that they are, 93 percent, last independent survey that the owners have got nowhere to go.

UNIDENTIFIED MALE: They'll go before us. If it takes one year, 10 years, 12 years, we'll still be here.

BOULDEN (voice-over): Well, seven years on, and he, Malcolm Glazer, and his family have not gone. And now they stand to make millions by listing some of their Man United shares on the New York Stock Exchange.

According to the prospectus, the main goal is apparently to pay down some of the debt. If that is successful, then Man United would spend less money paying interest on the debt and fans hope more money on bringing in star players to at least counter the Middle East wealth propping up last year's English League winners from the Blue side of Manchester -- Jim Boulden, CNN, London.

(END VIDEO CLIP)

QUEST: Anyone over 40 knows that football hasn't always been about leveraged buyouts and dual-class share structures. The true spirit of the game will be on show tonight in London, when teams from Japan and the U.S. play in the women's Olympic final at Wembley Stadium.

Now Wembley was also the home of the 1948 Games. Britain was still recovering from the Second World War, and the players were using ration cards to get their food. To get insight, I was delighted to sit down with one player who played in 1948 during my visit to Singapore.

QUEST (voice-over): His real name is Chia Boon Leong. And that all changed as soon as he touched a football. And he became known as Twinkletoes, the star of China's football team in that summer of 1948.

CHIA: We had to stand outside the Wembley Stadium for three hours, you know, before we could march in. And march past King George VI was there, (inaudible).

QUEST: Was there great atmosphere?

CHIA: At that time, not so, because immediately after the war, there was some rationing going on and we, besides getting our allowances, our surprise, we get -- I received 12 coupons. So then that allowed me to buy chocolate, sugar, milk, ham and eggs and all that.

QUEST: What do you think of today's Olympics and football?

CHIA: They are very passionate and very emotional compared to our days. You know, our time, like for instance, if we would score a goal, you find our captain would just wish you, you know, give you handshakes, "Well done," and that's all, not like now, jumping over you, kissing you and so on, you know?

(LAUGHTER)

QUEST: You never questioned a referee's decision, did you?

CHIA: Yes. Being small, I would always try to play a clean game. And I always believed in sportsmanship, even if I lose, because it's better to lose sportingly than to win badly.

QUEST (voice-over): Twinkletoes remembers 1948 as if it was yesterday, because this 87-year-old athlete is still an athlete at heart.

CHIA: I wish were young again, you know. I envy the present generation where they can see themselves on TV, color TV. There is, during my time, hardly any opportunity to see yourself playing. No TV at that time.

(END VIDEO CLIP)

QUEST: I hope I'm that sprightly at 60, never mind 87. Extraordinary. Must be something they put in the water in Singapore. We'll be back with a weather update after the break. This is QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUEST (voice-over): The "Currency Conundrum" answer, how the cifrao symbol in the Brazilian real differs from the dollar sign, the answer is B, it has two vertical strikes through it, where the U.S. dollar has just one. Interesting. I always thought it was almost the other way `round.

The weather forecast now, Tom Sater's at the World Weather Center this evening.

TOM SATER, AMS METEOROLOGIST: Yes, Richard, I want to piggyback on the story of the drought in the U.S. and how reports this morning have come out that excessive drought, to, you know, extreme drought really has expanded somewhat. Where do they need rainfall? And of course, in the middle of the country, the Corn Belt, we've got the wheat, this is a big area of concern.

We've had a strong area of high pressure that's been setting up for months, keeping it extremely dry. We've heard about the wildfires, many out west in Colorado, even into Oklahoma. But the lack of rainfall in the middle of the country, in the heartland, has actually produced somewhat of a drop in meat prices. It came out this morning.

It'll be just for a short time, but cattle ranchers that have had the farms, cattle ranches for generations, 40, 50, 60 years are selling out. They cannot afford to feed or even water the livestock.

Large ridge, talked about, has set up over 5,000 high-temperature records were broken in July. And now the latest statistics have come in on the U.S. When you look at the month of July, almost the entire U.S. -- well, we just kind of went through that -- almost the entire U.S. is looking at the hottest July on record.

In fact, if you go back to the beginning of the year, the first seven months, the hottest since weather records have been kept in the U.S., and that goes back to the late 1890s. Even the last 12 months, hottest on record.

Notice extreme, notice exceptional drought here, really in the heartland, where they need it of course. We're finding the Mississippi River that was at massive flood stage just a year ago, is down 15 meters.

So barge traffic, commercial merchants' barges, have had to halt their progress because it's just too low. We're looking at the drought to really continue, I think, in the middle of the country, a little bit of rainfall on the way, not enough to help them out, 20 percent in extreme drought or even worse.

Then you get into India, where the monsoon season means everything for them. In fact, it has been down about 23 percent, but they've had an uptick in some rainfall in the last several days. But it's still in a drought situation.

India's farm minister yesterday in Mumbai reported that they're possibly looking at some cases, the worst drought, worse than it was in 1972. Currently 17 below average. But notice in areas of red and yellow where they need the rain, it's Rajasthan, it's Gujarat (ph) at the worst flood that they've had there in 25 or the worst drought in 25 years in Maharashtra, the worst, Richard, in 20 years.

So this is going to mean a lot, of course, for sugar, for cotton and other, of course, economic produce as we find there.

QUEST: Tom Sater at the World Weather Center, we thank you for that.

And that is QUEST MEANS BUSINESS for this Thursday. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. MARKETPLACE EUROPE is next.

(COMMERCIAL BREAK)

QUEST: From London, this is marketplace. I'm Richard Quest. A city well used to the buzz of business is now pulsating with Olympic adrenalin. Teamwork, pulling together for competitive advantage, these are qualities well known in the world of sport. And now when sport and business comes together, it's a powerful combination.

(BEGIN VIDEO CLIP)

QUEST (voice-over): In a moment, the business is putting their technical and engineering muscle behind British athletes aiming for gold. And the chief exec of UBS, he believes providing logistics for the Olympics boosts brand recognition in Europe.

UNIDENTIFIED MALE: Our customers know about what we do every day. We deliver on a reliable basis for them, but not everybody knows about us. We -- this gives us an opportunity for people who don't know about UBS to see what we do.

(END VIDEO CLIP)

QUEST: In sport and in business, true success relies on attention to detail. In an effort to win more medals, the U.K. enlisted the help of more than 100 companies and academic institutions. The goal was simple: give Team GB the edge.

(BEGIN VIDEO CLIP)

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QUEST (voice-over): The wind tunnel's designed to test the aerodynamics of fighter jets. Now it has a new mission of national importance, to increase the performance of Team GB.

KELVIN DAVIES, PROJECT LEADER, BAE SYSTEMS: No matter where one looks, there's a component of engineering or technology in the sports. What we understand in BAE Systems, above everything else, is how a human interacts with technology. It's really important in our product lines, and that applies, to some extent, in sports as well.

What we're trying to help them to do is to understand how they should modify their tactics and optimize their bout, their fight, to maximize their chances of scoring, using that technology.

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QUEST (voice-over): Testing how materials react to stress is a key part of the company's core business. They've been channeling that expertise into testing these electronic scoring vests.

JAMIE ABLE, JUNIOR TAEKWONDO ATHLETE: Like one day, you work on impact. You kicking here will have more impact, which will be more likely to score than when he pushes in here. Kick here.

QUEST: And their research showed you that?

ABLE: Yes, yes. So they pinpointed a lot of the areas to see what's more likely to score and what's not more likely to score. So they used to have like grids, when they come down to the gym, and then they showed us how they like what reacted better. So these reacted better to this part here.

QUEST: BAE is one of a number of companies that have a technology partnership with U.K. sport, sharing their engineering skills.

DR. SCOTT DRAWER, HEAD OF RESEARCH AND INNOVATION, UK SPORT: Eighty- five percent of (inaudible) engineers are British, for example, so by knocking on their doors and trying to find the type of people who don't understand (inaudible) fundamental skills that can make a difference to how we operate, that's been one of the things that we've really encouraged in the innovation process.

So it's a bit like the way you build a business. You need human resources to partner. You unite the infrastructure. It's exactly the same for an athlete. You need those big things to be right, and you can be exceptionally competitive and win medals on the basis of that.

What we're trying to do is, in effect, increase the probability of being more successful and that's where science and technology play a really fascinating role in the success of Team GB.

QUEST (voice-over): BAE and U.K. sport put the value of the partnership at around $2.3 million in employee hours and equipment. It's an investment the company believes will reap business rewards.

DAVIES: We're working with sports for one fundamental reason, really, and that's to inspire the engineers of the future to take up (ph), to think of engineering for showing how exciting the technology can be applied to something as dynamic and interesting as sports.

QUEST (voice-over): Attracting talented engineers as well as inspiring a generation of athletes, it's all part of the effort to keep Great Britain ahead of the competition.

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QUEST: Coming up after the break, we meet the boss of a company with a true Olympic challenge: logistically having to move more than 30 million items, everything from hangers to tennis balls.

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QUEST: Welcome back to MARKETPLACE EUROPE in Olympic London. With business ever more global, the increasing challenge now is logistics, moving raw materials and finished goods around the world. Managing the supply chain has become crucial. Making the most of precious time and resources, it involves sophisticated technology and a great deal of know- how.

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QUEST (voice-over): UPS is the world's largest package delivery company, with a workforce of around 400,000 people and revenues of $53 billion. And now it's looking to expand in Europe through the acquisition of the Dutch company TNT Express. It's a $6 billion deal being considered by European regulators who recently extended the deadline.

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SCOTT DAVIS, CHAIRMAN AND CEO, UPS: For UPS, we're all about logistics. We love logistics. The Olympics is all about logistics. You know, we move 30 million items during the Olympics. So it's a great opportunity for us to show the world how capable we are in the world of logistics.

You know, if you look at 30 million items, if you dump all the 34 venues upside down, everything that falls out we move except for the people and the horses.

QUEST: And in terms of quantifying its benefit, yes, you could turn `round to me and say, well, we may move 15.2 million as a result of doing the Olympics next year. But that's not what this about, is it?

DAVIS: No, it's just -- I think it's letting the world know that UPS is global, reliable, flexible. And it just helps the brand recognition. We did this in Beijing and in Beijing, we measure those type of things in our brand recognition. It went up 33 percent.

In Europe, we're -- we have a big presence here. We're in the middle of big acquisition of TNT. So I think it's more important that we seem to expand the brand for UPS in Europe today.

QUEST: Were you surprised with the media uptake of your comment in your analysts' call, when you actually said that you thought the U.S. economy was going to grow perhaps 1 percent, or at least less than just about everybody else had been thinking?

Of course, you're rapidly becoming to be proved right by the last set of numbers. But were you surprised at the speed that what you're seeing is not yet reflected maybe in the macroeconomic numbers?

DAVIS: You know, I'm not an economist per se, but I think we are a great barometer of what's going in the economy. We moved in the U.S. 6 percent of the GDP every day. So we get a great look at what's going on.

I think it's -- again, I think the economy will grow, but at very slow pace. I think the uncertainties heading into the second half of the year, the fiscal cliff in the U.S. is a big challenge and our businesses are -- we have a lot of small business customers when there's uncertainty out there in tax policy and spending policy, they're not going to hire people; they're not going to invest.

And I think that's going to slow things down for the next six months until we make some decisions in Washington.

QUEST: Coming to this side of the Atlantic, are you impressed with the way Europeans have dealt with their debt crisis or horrified?

DAVIS: Probably, Richard, mixed. I think that it's, like the U.S., it's not happening fast enough. I think there are a lot of efforts being made. Unfortunately, every day, the headlines differ. You're optimistic one day and pessimistic the next day. I think they'll get it done, you know.

Our idea of investing in TNT, the people looked at me like, are you crazy? You're in acquisition in Europe at this point in time? And we're a long-term investor. We think Europe will be fine in the long term. I think it's got a turbulent, rough couple of years. But we think long-term, Europe will be competitive and do fine.

QUEST: Just as much as you see what is happening in the U.S. economy, perhaps to a larger extent, your business here tells you what's happening in the European economy. What's it telling you? Is there still (inaudible) uncertainty that's now taking its effect on business decisions?

DAVIS: It actually has been recently good for UPS in Europe. It is slowing from what we saw earlier in the year. But we're still showing growth in Europe. You know, our transborder growth is strong. Europe exports aren't too bad.

You know, we're seeing some slowing, certainly in southern Europe. You know, we're seeing a slowing in our volume. But I'd say it's relative to the rest of the world. The weakest part of the world right now for us is Asia exports, of all things.

QUEST: You're showing beautifully in that statement the tapestry of the global economy. Asia's exports are weak because Europe is weak. And the U.S. is --

QUEST: Are you preparing in UPS for something really nasty to happen in Europe in the Eurozone?

DAVIS: I think, you know, we're big scenario planners. So we have to do that. We have to say what happens, you know, if the Eurozone does implode? We do the same thing in the U.S. What happens if we don't solve the debt problems in the U.S.?

And we have just as big problems, I think, in the U.S. in the future. We have to look at what if. Now the probabilities may be very low, but you need to understand what happens, what happens if everybody devalued currencies and how that would change the world.

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QUEST: Scott Davis, the chairman and chief executive of UPS. Next week, Juliet Mann road-tests the technology that's keeping Italy's leading shoe brand one step ahead of the competition. And that's MARKETPLACE EUROPE for this week. I'm Richard Quest in Olympic London. Whatever market you're in, I hope it's profitable. I'll see you next week.